AOL Fishes Where TV Dollars Are: Mediaocean
Like a lot of publishers, AOL is showing off a lineup of new programming in hopes of attracting viewers and exciting advertisers.
But AOL's video chief Ran Harnevo is more excited about something happening behind the scenes. AOL will become the first digital publisher integrated into Mediaocean, the predominant software platform that agencies use to buy TV advertising.
It's super-technical and back-office, but when media planners allocate money, they use software, and Mr. Harnevo believes the move will allow advertisers to TV dollars to video elsewhere seamlessly, if they choose to do so. More back-office: they are doing it through a video ad server called FreeWheel, which will soon assist other publishers to access Mediaocean software.
That, combined with Nielsen online campaign ratings, will mean TV can be compared to digital video on the apples-to-apples basis of reach and frequency, rather than web metrics like views or time spent.
More than $150 billion in ad spending is processed through Mediaocean, including plenty of TV budgets. "We feel this is the time to merge the industries if the content is good," Mr. Harnevo said.
The truth is that while adland lines up for the so-called NewFronts, the dollar amounts actually spent on digital inventory ahead of time are very small, pulled mostly from existing digital budgets and not from TV. "There is little urgency to change this because the scale of web video remains small," wrote Brian Wieser, an analyst at Pivotal Research and former forecasting director at Magna Global. "Recent data from Nielsen indicates that desktop/laptop viewing of video indicates equaled 4.3% of TV viewing among the people watching any online video, and 2.5% of total TV viewing."
That doesn't include connected TV viewing, but you get the picture.
But that doesn't also mean that friction isn't also an issue. One of the reasons TV gets the dollars is because its easy to buy compared to video. If video can't be compared on a like basis it has little chance of breaking into the truly big budgets, no matter how many viewers it starts to attract.
On the content front, AOL bought the rights to a film sure to attract nerds of a certain age: "Downloaded: The Story of Napster," produced by Napster founder Sean Fanning and partner Sean Parker, which comes to theaters in June. AOL plans to cut it up into web-sized bites and like everything it does in video, distribute across the 5Min network it bought three years ago.
The company announced 15 different original series today with celebrities like Sarah Jessica Parker, who is executive producer of "City.Ballet," Nicole Richie, whose Twitter feed takes center stage in #CandidlyNicole, and Gwyneth Paltrow, who will interview women overcoming hardship in "Second Chances." Hank Azaria will document his own life as a first-time father in "Fatherhood."
That and Monday AOL announced that its daily live online news network Huffpost Live will be carried on Mark Cuban's AXS TV cable network. "AOL has never produced content at such scale," Mr. Harnevo said.
For brands wishing to create and distribute their own content, AOL is launching Be On, a production studio and distribution network across the web, mobile and connected TVs.